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Catering can be both a financially and emotionally rewarding business for someone who enjoys cooking and entertaining. You don't have to make a huge profit off each job in the beginning, but you need to know how to determine your catering prices. A caterer must not only be a great cook, but she must be well-organized and willing to please her clients.

When you're starting out, it can be difficult to figure out how much to charge, especially if you start out working with people you know, such as friends and family. Remember, though, that you have to pay for all of your food and equipment and that your time and effort are valuable.

Review Menu With Client

Go over the menu with your client and make sure the ingredients you use are appropriate and approved, if necessary, by the client. For example, if she wants grass-fed beef, you may need to verify the beef price and supplier before purchasing. Find out how many guests will be attending the function. If every guest is being served a specific appetizer and entree, it will be easier to determine how much each person will eat than if you are having a buffet.

Necessary Ingredients and Supplies

Make a detailed ingredients list with amounts and add up the total food bill. Most caterers strive to make the food about 30 percent of the total. Figure that every person will eat 4 to 6 ounces of meat and a serving of each of two side dishes plus appetizers and dessert. Calculate how much disposable items such as napkins and tablecloths will cost as well as the cost of chairs or chafing dishes you need to rent.

Consider Overhead Costs

Figure out how much you pay per month for overhead. Overhead is your electricity, gas, marketing costs and other business-related costs that are not directly related to the event at hand. Once you determine this cost, can you charge a certain amount per event to cover those costs.

For example, if your monthly overhead is $500 a month and you do five events per month, you should add in $100 per event. You will have to adjust this cost as necessary.

Determine Labor Costs

Determine how much your labor costs you. Add in the cost of servers or any assistants you hire for the event. In some cases, you will need to add in their gratuity as well. You need to come up with an hourly wage that is adequate to compensate you for your time and effort.

Determine Fixed Costs

Add up the fixed costs and then multiply the per person charge by the number of people. Add these two numbers together to get your final cost for the job and then add in your profit.

Allow for a Profit Margin

Add on what you consider to be a reasonable amount of profit. Determining how much profit you make from a particular job can be difficult, especially when you are starting out. You can do it by percentage, such as a 25 percent profit margin or you can charge a certain fee. Sometimes, it's best to see what a client's budget for the project is and then try and work within those boundaries.

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About the Author

Michelle Hogan is a writer and the author of 13 books including the 2005 bestselling memoir, "Without a Net: Middle Class and Homeless (With Kids) in America." Hogan studied English at American University and has been writing professionally since 1998. Her work has appeared in "The New York Times," "Redbook," "Family Circle" and many other publications.